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Coming Week: Temporary Lull (Stock Marker)
http://www.thestreet.com/s/coming-week-temporary-lull/markets/marketfeatures/10376383.html ^ | 8/25/2007 | Liz Rappaport

Posted on 08/25/2007 7:28:43 AM PDT by Hydroshock

Consider the coming week the calm before another potential storm.

With Labor Day looming and the markets coming off a relatively stable week, many traders likely will be claiming their last chance at summer vacation.

Meanwhile, investors trying to find the red-flag indicators of the economic fallout from this summer's credit crunch will have to wait until after the holiday to sniff out the best clues.

July's economic data were solid, and fear trades like three-month T-bill rallies and volatility spikes settled down last week. Friday's stronger-than-expected durable goods orders and new-home sales for July deflected the market's focus from still-weak liquidity levels in the credit markets and allowed stocks to rebound.

The three major indices finished the week on a positive note, with the Dow Jones Industrial Average rallying 143 points on Friday. That helped the index gain 2.3% for the week. The S&P 500 added 2.4%, and the Nasdaq rose 2.8% over the five sessions.

But Friday's rally was built on July data that came before the worst moments of credit-tightening. The commercial paper market didn't seize up completely until August, and that's when the Fed started injecting liquidity.

It won't be until August's monthly economic data roll in before the markets learn more about the implications of weak liquidity on U.S. corporations' behavior.

(Excerpt) Read more at thestreet.com ...


TOPICS: Business/Economy; Government; News/Current Events
KEYWORDS: stockmarket; stocks; thestreet
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1 posted on 08/25/2007 7:28:44 AM PDT by Hydroshock
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To: Hydroshock

Good lord. These people never stop, do they?


2 posted on 08/25/2007 7:37:23 AM PDT by Perdogg (Cheney for President 2008)
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To: Hydroshock
Amazing to compare and contrast the economics “reporting” under a Democrat and a Republican President.

Under Clinton you would hear so so economic data, such as job numbers that were worst then anything under Bush, and the writers would be orgasmic about how great the improvement was over what had been expected and how it all had to do with Clinton.

Now compare that to the coverage under both Reagan and Bush 2. You have truly great economic data released and all the “news” media does is feverishly spin and go into hysterics about how the good news really isn’t good news and disaster is just around the corner.

3 posted on 08/25/2007 7:46:14 AM PDT by MNJohnnie (Donate to Vets For Freedom! http://www.vetsforfreedom.org/)
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To: Hydroshock

What difference does it make? Global warming and Chinese merchandise are going to kill us all anyway.


4 posted on 08/25/2007 7:46:19 AM PDT by Mr Ramsbotham (Laws against sodomy are honored in the breech.)
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To: Perdogg

5 posted on 08/25/2007 7:48:38 AM PDT by RightWhale (It's Brecht's donkey, not mine)
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To: Hydroshock

http://cramerwatch.org/


6 posted on 08/25/2007 7:54:28 AM PDT by vietvet67
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To: Hydroshock
Posted On: Friday, August 24, 2007, 6:53:00 PM EST

A Letter To Chairman Bernanke Author: Jim Sinclair

Blockquote>Dear Chairman Bernanke,

This is a problem based on the revelation that over the counter derivatives on credit and defaults are:

Without regulation.

Without listing on public exchanges. Without standards.

Therefore not in the least bit transparent.

Therefore without an open market of the bid/ask type.

Dealt in by private treaty negotiations. Without a clearinghouse.

Unfunded without financial guarantee of any kind. Functioning as contracts of specific performance.

Financial character or ability to perform is totally dependent on the balance sheet of the loser in the arrangement.

Evaluated by computer assumptions made by geek, non market experienced mathematicians who assume religiously that all markets return to their normal relationships regardless of disruptions.

Now in the credit and default category alone considered by accepted authorities as totaling more than USD$20 trillion in notional value.

Notional value becomes real value when the agreement is forced to find a real market for ending the obligation which is how one says sell it.

Interest rate adjustment will not replace the necessary act of providing liquidity in proportion to the problem. When the Fed was initiated, its prime legal directive was to provide liquidity in periods of disruptive credit problems.

Adjustments of interest rates can only hope to hide the problem for a time, causing a global extension of liquidity at unprecedented levels. Good luck, but your academic approach is unlikely to do much and will only lose precious time.

Sincerely, Jim Sinclair

Sinclair, is smart, honest and able to see problems before most. The URL for this can be found: HERE.

At least glancing at his efforts and several of his colleagues will help you understand what usually only the professional traders understand.

7 posted on 08/25/2007 8:21:19 AM PDT by shrinkermd
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To: MNJohnnie

Please explain a couple of things to me. First let me say I am not in the mood for an argument, I’m looking for answers.

We’re what, 8 or 9 trillion in debt and it seems as if everything for sale in American stores is manufactured in China. One major company after another is being bought out by foreigners who are rolling in cash, or so it seems. We, the federal and state governments, are willing to sell off anything and everything for a few dollars to whomever shows up with cash.

People with large debt loads aren’t financially secure, IMO. America has a large debt load so I don’t feel we are financially secure. I’m probably wrong but that’s how I see it.


8 posted on 08/25/2007 8:32:06 AM PDT by B4Ranch ( "Freedom is not free, but don't worry the U.S. Marine Corps will pay most of your share.")
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To: B4Ranch; All

I have been hearing the same crap when Reagan was President...


9 posted on 08/25/2007 8:34:03 AM PDT by KevinDavis (Mitt Romney 08)
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To: KevinDavis

I recall hearing the same crap when Ike was president.


10 posted on 08/25/2007 8:36:09 AM PDT by reformedliberal
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To: Hydroshock

I’ll be very interested to see the August numbers.

I’ve been watching the flow of junk faxes to my office. They seem to be correlated to the general flow of the economy.

In August the junk faxes all but stopped.

It will be interesting to see if there is any validity to my theory.


11 posted on 08/25/2007 8:41:44 AM PDT by live+let_live
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To: B4Ranch

The current US government debt is quite low in relation to the norms of developed countries and historically. Every country (or nearly so) has a huge debt load and always has.

Its a good thing to have foreigners investing in the US. I have been in countries where they try to keep foreign investment out, for nationalist reasons, and they do badly.


12 posted on 08/25/2007 8:58:18 AM PDT by buwaya
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To: KevinDavis

With more justice, as the debt really did increase remarkably fast in Reagans time, but even then the risk was wildly overblown.


13 posted on 08/25/2007 9:00:02 AM PDT by buwaya
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To: buwaya; All

The phrase I remember was keeping up with the Joneses...


14 posted on 08/25/2007 9:02:38 AM PDT by KevinDavis (Mitt Romney 08)
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To: buwaya

One question: What is the result for America if we wake up tomorrow to find out that for whatever reason we went to war with China during the night?

So sure, currently we can defeat them. We do and what happens to us when they refuse to trade with us?


15 posted on 08/25/2007 9:03:27 AM PDT by B4Ranch ( "Freedom is not free, but don't worry the U.S. Marine Corps will pay most of your share.")
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To: Perdogg
They love to fear monger. The facts are that the August news is already known and it has been discounted by the markets. This numb nuts has it entirely wrong when he claims next week will be calm because traders want to take advantage of the last week of vacation before Labor Day. Actually traders are likely to dump a ton of stock if they even smelled another shoe dropping in the sub prime fiasco. It is uncertainty that causes drastic drops in the markets and that is what we saw in early August.

There is a lot of info coming out next week and this will be a good test to show if the markets have regained a lasting measure of stability.

16 posted on 08/25/2007 9:06:01 AM PDT by Eagles Talon IV
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To: buwaya
You have the correct perspective re our debt. People should stop looking at the AMOUNT of debt and instead view it as a % of the GDP. In those terms it is at historically low levels.

America is still the wealthiest nation by far.

17 posted on 08/25/2007 9:09:05 AM PDT by Eagles Talon IV
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To: B4Ranch
"...what happens to us when they refuse to trade with us?"

Simple, since we are their biggest customer, they will slide into a recession and we will have to buy from elsewhere and all pay a bit more for whatever we buy that used to be from China.

18 posted on 08/25/2007 9:11:32 AM PDT by Eagles Talon IV
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To: Eagles Talon IV; buwaya

Thanks for your opinion. I’m still waiting for buwayas.


19 posted on 08/25/2007 9:19:29 AM PDT by B4Ranch ( "Freedom is not free, but don't worry the U.S. Marine Corps will pay most of your share.")
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To: B4Ranch

We have a small disruption in sourcing, as production moves to SE Asia, South America, or stays right here. China completely collapses as it loses 30% of it’s GDP.

Understand that the US actually MANUFACTURES 3 times the amount that China does, by value - $2.4 trillion versus $860 billion. And that the amount that we manufacture is GREATER than the entire Chinese GDP (which is around $2.2 trillion).

If trade is halted with China, we’ll go through some pains, but life will carry on. WalMart will get their stuff made in Thailand, Cambodia, India, Brazil. That $700 billion trade deficit will shift elsewhere - it’s 5% of our economy.

For China, though, they lose a full THIRD of their economy. They collapse completely.

Remember, when the US economy has a small hiccup, the rest of the world has a full-body convulsion. Look at what happened in the last few weeks with the “housing crisis”. Our Fed pumps in a few billion and drops rates a touch. Europe has to pump in ten times as much money, and the Asian markets dive 3-5 TIMES as much as the US market.


20 posted on 08/25/2007 9:23:58 AM PDT by PugetSoundSoldier (Tagline: Kinda like a chorus line but without the legs)
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